As President Donald Trump and Republican leaders on Capitol Hill push their plan to improve health care, the CEO of Permanente Medical Group said on Tuesday he would prioritize two changes to the broken system: updating the old technology used by the medical industry and overhauling the way doctors and hospitals get paid.

"We're working towards a cliff. If we don't change direction, we're simply going to step off the edge," Dr. Robert Pearl told CNBC's "Squawk Box." "Not only does it threaten the medical health of this nation, it's going to threaten the economic health of this nation." He said the cost of health care is rising "more rapidly than we can pay as a nation."

Pearl would model changes in health care based on the managed-care system of Kaiser Permanente. The Permanente Medical Group is composed of more than 9,000 doctors and 34,000 staffers, serving Kaiser's some 4 million members in the states of California, Virginia and Maryland, as well as the District of Columbia.

"Every one of our physicians are full-time here. Every one of our physicians are paid on a basis of value — high quality, high service," Pearl said, arguing the current fee-for-service model used by most insurance providers "is simply broken."

Another major challenge facing the health-care industry, according to Pearl, is the use of "information technology from the last century." He advocates a modernization of the way patients and doctors interact, saying it should be commonplace for them to communicate through email and live video calls in addition to in-person appointments.

Sign Up for Our Newsletter
Morning Squawk

CNBC's before the bell news roundup

SIGN UP NOW

Get this delivered to your inbox, and more info about about our products and services. By signing up for newsletters, you are agreeing to our Terms of Use and Privacy Policy.